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RBA expected to be unchanged - BAML

FXStreet (Guatemala) - Analysts at Bank of America Merrill Lynch previewed next week's Reserve Bank of Australia (RBA) Board meeting and expect them to do nothing.

Key Quotes

"With the unanimous expectation that rates will be on hold, focus will again be on any changes in the tone of the communication.

“We think there is at least some marginal potential for additional cautious language in next week's communication that will accompany the Board meeting decision."

"This is particularly true for short-term growth and the labour market. However, none of this should be particularly new and it should have been largely priced in by the market. This is because it has been foreshadowed by either the Governor himself or in the Statement on Monetary Policy (SoMP)."

"The RBA's communications recently have highlighted the uncertainties in the outlook with adjustment in resources sector investment. And until at least some measure of certainty returns, we expect the RBA to do nothing. This leads us to maintain our view that policy will remain unchanged until 2016, and when the tightening cycle begins it will be very tentative."

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